# Amicus Curiae Brief — FMC Corp. v. Holliday

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0698%3A04

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1990
- **Citation:** 498 U.S. 52

## Text

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’ OSES SPANIOL, JR,

No. 89-1048

IN THE
SUPREME COURT OF THE UNITED STATES
October Term, 1989

FMC CORPORATION,

Petitioner,
V.

CYNTHIA ANN HOLLIDAY,

Respondent.

PETITION FOR A WRIT
OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE THIRD CIRCUIT

BRIEF IN OPPOSITION TO THE PETITION
FOR WRIT OF CERTIORARI

John Patrick Lydon, Esquire
Counsel of Record

Sikov and Love, P.A.

1400 Lawyers Building
Pittsburgh, PA 15219
(412)261-4202

Counsel for Amicus Curiae,
Pennsylvania Trial Lawyers Association

BEST AVAILABLE COPY

i

QUESTIONS PRESENTED

l. Should this Court grant certiorari on an
ERISA preemption claim where the ERISA plan
already took advantage of certain provisions
of the state law and only seeks preemption of

certain other portions?

2. Should this Court grant certiorari and
review a Pennsylvania motor vehicle insurance
statute where there is no conflict among the
Courts of Appeals on the issue of ERISA
preemption as to such statutes and where this
Court has previously declined to review the

same result?

ii
3. Should this Court review the Third

Circuit decision concerning the meaning of
ERISA's deemer clause when the Pennsylvania
statute does not relate to ERISA plans to such
an extent as to come within ERISA's initial

preemption clause?

iii

TABLE OF CONTENTS

Page
Questions Presented...ceccccccccscecsees i
Table of Authorities... cccccceseereeces Vv
Statement of the Interest of Amicus Curiae
Pennsylvania Trial Lawyers Association..,.. l
Statutes Involved... sceccceveccvevvscces 3
Summary Of REASONS. ...ceeescccceccevesecs 5

Reasons for Denying the Writ:

I. The Petitioner having availed itself
of the benefits of the Pennsylvania
Motor Vehicle Financial Responsibility
Law cannot now argue that the law is
PPEEMPTed.. cee ccc sceseccccsessceces 10

II. The Court of Appeals did not disregard,
and its decision is not contrary to,

this Court's decision in Metropolitan

Life Insurance Co. v. Massachusetts... 13
III. There is no substantial and direct

conflict among the Courts of Appeals

that a decision in this case will
EE ESSE IETS OTT TTT TTT TT 16

iv

IV. There is no federal interest in
preempting the Pennsylvania Motor
Vehicle Financial Responsibility

iF POUTTTTLTTTTTLIT eee Te ee TT 21

Vv. The Pennsylvania Financial Responsibilty
Law does not "relate to" this plan
such that it would be preempted by
ee 0666666006 0000460058 6ERES 6b OOO 24

GOROGLUBIOD sc 0 000000 00h 0b bb0eeeseseseseseee 27

eS

Vv

TABLE OF AUTHORITIES

Page

Alessi v. Raybestos-Manhattan, Inc.,

eeeeseeoeeeeee¢e SI ASISOVSIVRSIVSASSC STITT 99E0S98 15

Baxter v. Lynn, 886 F.2d 182, reh'g
a cet. 2a » (8th Cir.
1989

eeeeoeeeeseeeseseeeespeeeeneeeeeeneseeeeeseeeeee 19

Children's Hospital v. Whitcomb, 778
F.2d 239 (5th Cir. 1985)

@eeeeoeeeoeew ease eeeeweseeweeeeeeeeeeeeeeeee? 18

FMC Corp. v. Hollida 885 F.2d 79,
reh'g denied, _—F. “S34 ___, (3d Cir.

1989)

eeeeoeeeeneeesteeneeereenstseeeeeneneeeeteeeeneneneneeeee passim

Fort Halifax Packing Co., Inc. v.

Coyne, 482 U.S. 1, 107 S.Ct. 2211,
96 L. Ed 2d 1 (1987)

eeeeseeeenetesensrteeenreeeweeespeensesteeneeeseeeeoeeeee @ 15

ansurance Board of Bethlehem Steel
orporation v. Muir, 819 F.2d
tia- Cir. 1987)

eeeeteeoeeeeeeeneeeeeeeeeeeeeseeeeeeeeeeee 6, l/

Liberty Mutual Insurance Group v.

Tron Tron Workers Heath Fund of Fastern
Michigan, 67 gan, © “Feed 1304, reh'g

denie >. 2d ss (6th Cir. 1989)

eeeeoeeeeeeeeneeeeeeeeeeeeeeseeeeeeeee © @ 17

vi

Page

Mackey v. Lanier Collections ABCRCY 3
~ os , Ut. 9
L.Ed 2d 836 (1988)

eeeeseeoeeoeveeeeeeeeeeeeeeeeeeeeeee eee l2, 25

Metropolitan Life Ins. Co. v. 6, 7, 12
Massachusetts, 471 U.S. 704, 105 13, 14
S.Ct. 2300, BS L.Ed 2d 728 (1985) 15, 16

eeeeeoevoeeeeeeeeeeeeeeeeeeeeeeeeee eee 19

Northern Group Services v. Auto
Owners Inc. Co., 533 F.2d 85 (6th
Cir. 1987), cert. denied, 108 S.Ct.
1754 (1988)

eeeeoeeeeeeeeeeeeeeeeeeeeeeeeeeeaeeee 8, 19,

Pilot Life Ins. Co. v. Dedeaux
48i U.S. Wi, 107 S.ct. 1549, 95
L.Ed 2d 39 (1987)

eeeeeeoeeeeeeeeeeeeeeeeeeeeeeeeeneeeee 14

Powell v. Chesapeake and Potomac
Telephone Co. oF Virginia, 750 F.2d
qi9 Cith Cir. 1985), cert. denied,

S76 U.S. 1270 (1986) .ccccccccccesece 8, 19,

Reilly v. Blue Cross and Blue
Shiels United of Wisconsin, 646
: 1 th Cir.),cert. denied,
104 S.Ct. 195 (1988)... cccccccccccce 8

vii

Page
Shaw v. Delta Air Lines, Inc., 463
U.S. 55, 103 S.Ct. 2090, 77 L.Ed
2d 490 (1983)

ELLE OO Oe eee EET TT. |e 25

United Food & Commercial Workers

oyers Arizona Health &
Welfare Trust v. Pacyga, BOl F.2d
t r.

esceeeevevee2eee202e2e20202020002802828078080808080880808080787 87 8 19

STATUTES:

29 U.S.C. SLLUN (a) cc ccccccccccccvcces 5, ll,
25

75 Pa. Cons. Stat. Ann. §1719 _

eeceeveeveee2eeee282020202802802802802802808080808080887808078087808087 8 il, 12

75 Pa. Cons. Stat. Ann. §1720.....++- 11

a

1

STATEMENT OF THE INTEREST OF
AMICUS CURIAE PENNSYLVANIA
TRIAL LAWYERS ASSOCIATION

Pursuant to Rule 37.2 of the Rules of the
Supreme Court of the United States, the
Pennsylvania Trial Lawyers Association files
this Brief as Amicus Curiae supporting the
position of Respondent Cynthia Ann Holliday.
Signed consents permitting the filing of this
Brief, from Counsel for Petitioner FMC
Corporation and from Attorney Thomas 4G.
Johnson representing Respondent Cynthia Ann
Holliday, have been filed with the Clerk of
this Honorable Court. The Pennsylvania Trial
Lawyers Association is a private non-profit
association with a membership of nearly 4,500
trial attorneys in the Commonwealth of

Pennsylvania, predominately representing

2

injured parties in their attempt to seek
redress for their injuries in the Courts. The
issue of subrogation in Pennsylvania
automobile cases has a significant impact on
the interests of injured parties and on the
practive of iaw in Pennsylvania. Any
determination, therefore, by this Honorable
Court of the issues in the case at bar will
directly affect the members of the
Pennsylvania Trial Lawyers Association and the
interests of their clients.

This Brief is filed timely pursuant to
the schedule established by the Rules of this
Honorable Court for the filing of Briefs in
Opposition to a Petition for a Writ of

Certiorari.

3

STATUTES INVOLVED

In addition to the statutes identified by
Petitioner, this case involves Section 1719 of
the Pennsylvania Motor Vehicle Financial
Responsibility Law of 1984 (the "Financial

Responsiblity Law") which provides:

(a) General rute. - Except for
workers' compensation, a policy
of insurance issued or

delivered pursuant to this
subchapter shall be primary.
Any program, group contract or
other arrangement for payment
of benefits such as described
in section 1711 (relating to
required benefits) 1712(1) and
(2) (relating to availability
of benefits) or 1715 (relating
to availability of adequate
limits) shall be construed to
contain a provision that all
benefits provided therein shall
be in excess of and not in
duplication of any valid and
collectible first party
benefits provided in section

1711, 1712 or 1715 or workers’

compensation.

75 Pa. Cons.
(Purdon 1984),

Stat.

4

Ann.

§1719(a)

© he ee

5
SUMMARY OF REASONS

The Petitioner seeks to have this Court
determine that Section 514(a) of the Employee
Retirement Income Security Act of 1974
preempts the Pennsylvania Motor Vehicle
Financial Responsibility Law of 1984. If the
state law were preempted, it would be
preempted for all purposes. Both the District
Court and the Court of Appeals, however, found
that the Petitioner herein availed itself of
the benefits of the Financial Responsibility
Law to reduce the amount that it would have
been required to pay on behalf of the
Respondent. The decisions of this Court do
not allow an ERISA plan to pick and choose

those parts of a state law which benefit the

6
plan but "preempt" those parts that the plan

does not find desirable. Consequently,

certiorari should not be granted herein where
Petitioner has already taken advantage of the
law it now seeks to have preempted.

The Petitioner incorrectly argues that
the Court of Appeals for the Third Circuit did
not follow this Honorable Court's decision in
Life Insurance

Metropolitan Company iv.

Massachusetts, 471 U.S. 724, 105 S.Ct. 2380,

85 L.Ed. 2d 728 (1985).
The decision of the Court of Appeals in

this matter specifically cited Metropolitan

Life and the Court of Appeals for the Third

Circuit has applied the dictates of

Metropolitan Life in prior decisions. See

Insurance Board of Bethlehem Steel Corp. v.

wee Ree Ar Ore

Muir,

7
R19 F.2a 408 (1987). The Court of

Appeals simply held that Metropolitan Life was

not controlling in this case.
There is not a substantial and direct
conflict among the Courts of Appeals on this

issue. The decisions cited by Petitioner to

support its argument of conflict involve

different issues than the question of

preemption of a state automobile no-fault

insurance statute. It is noteworthy that this
alleged "conflict" has existed for quite some
time and that this Honorable Court has on at
least three prior occasions refused writs for

certiorari in the same cases used by

Petitioner to support its present argument

about this "conflict".1 The Petitioner

presents no reasons as to why this Court
should now grants its petition having thrice
refused this issue.

This

case does not have national

Significance such as would justify consuming

the judicial resources of this

Honorable

Court. In addition, this amicus curiae

1. Powell v. Chesapeake and
Potomac Teiephone Go. oF Virginia
780 F.2d “id (ath Cir. 1985), cert.
denied, 476 U.S. 1170 (1986); Reilly —
v. Blue Cross and Blue Shield Unites

of Wisconsin, 046 F.od
» cert. denied

r.
104 S.Ct. 145

(1988); Northern roup Services,
Inc. v. Auto Owners Insurance Co.,

: ° Jif. ), cert.
denied, 108 S.Ct. 1754 (i988).

;
3
if

9

presents an alternative argument that the
statute herein does not "relate to" ERISA such

that it should he preempted.

10

REASONS FOR DENYING THE PETITION FOR
WRIT OF CERTIORARI

I. THE PETITIONER HAVING AVAILEND ITSELF OF
THE BENEFITS OF THE PENNSYLVANIA MOTOR
VEHICLE FINANCIAL RESPONSIBILITY LAW

CANNOT NOW ARGUE THAT THE LAW
PREEMPTED. ”
It is uncontested that the FMC

Corporation took advantage of those provisions
of the Pennsylvania Motor Vehicle Financial

Responsibility Law that were helpful to it.

At a minimum, this included having the

applicable automobile insurance carrier pay
its full Ten Thousand ($10,000.00) Dollars of

medical benefits coverage before FMC paid any

benefits on behalf of the Respondent.

(Petition for Writ of Certiorari at page A4.)

The plan of the FMC Corporation specifically

incorporated into its

terms "no-fault"

ho ed et ah RM EBL BR ce BS

;
:
:

11

automobile insurance plans such as_ the

Pennsylvania law in question. (See Petition

at page A3.) Having now availed itself of

those provisions of the Financial
Responsibility Law which it considered
beneficial to itself, the Petitioner now

suggests that federal law should preempt those
portions of the Financial Responsibility Law

find beneficial, in

which it does not

particular Section 1720. It is important to
note that the FMC plan in this case was
included in section 1720 of the Financial
Responsibility Law by its identification in

of benefits provision of

the coordination
section 1719.
The Petitioner misunderstands the scope

of the preemption clause in Section 514(a) of

12

ERISA. The Petitioner cannot "pick and

choose" those portions of a state law which
are of benefit to it and seek to "preempt"

other portions. If a law is preempted, it
does not matter that portions of it would be
beneficial to the Petitioner or consistent

with ERISA requirements. Metropolitan Life

Insurance Co. v. Massachusetts, 471 U.S. 724,

105 S.Ct. 2380, 2389, 85 L.Fd. 2d 728 (1985);
Mackey v. Lanier Collections Agency, 486 U.S.

825, 108 F.Ct.

(1988).

2182, 2185, 100 L.Ed. 2d 836

FMC took advantage of Section 1719 of the
Financial Responsibility Law pertaining to the
coordination of benefits between automobile

insurance and _ the

plan and is therefore

estopped from arguing that other portions of

of ab te ti

s se es ne

13
the law should be preempted by FRISA. No
explanation has ever been offered by FMC at
any time during the pendency of this matter as
to why or how certain parts of the Financial
Responsibility Law would be preempted but not
Since FMC by its conduct has

other parts.

relied on and used the Financial

Responsibility Law to its own advantage, it is

estopped from arguing that the law is

preempted by ERISA.

II. THF COURT OF APPEALS DID NOT DISREGARD,
AND ITS DECISION IS NOT CONTRARY TO,
THIS COURT'S DECISION IN METROPOLITAN

LIPE INSURANCE CO. V. MASSACHUSETTS.

The Petitioner argues in its Petition

that the Court of Appeals for the Third

Circuit ignored this Court's decision in

14

Metropolitan Life when it analyzed the
congressional intent behind the ERISA
preemption, savings and deemer clauses. This

is simply incorrect.

This Court has repeatedly held that it is
necessary to analyze the purpose behind the
preemption clause to determine the intent of

Congress in order to decide if a state law is

preempted by ERISA. Shaw v. Delta Air Lines,

Inc., 463 U.S. 85, 95, 103 S.Ct. 2890, 77
L.Ed. 2a 490 (1983); Metropolitan Life, 105

S.Ct. at 2389; Pilot Life Ins. Co. v. Dedeaux,

48] U.S. 41, 51 - 52, 107 S.Ct. 1549, 95 L.Fa.
2d 39 (1987).
While the preemption clause of ERISA is

ver? broad, this Court has determined that "we

must also presume that Congress Aid not intend

eee eer. ee ee

nn

15

to pre-empt areas of traditional state

regulation." Metropolitan Life, 105 S.Ct. at

2389. Certainly state automobile insurance

laws are familiar examples of an area of

traditional state regulation. See Metropol-

itan Life, 105 S.Ct. at 2383.

that the preemption

Congress intended

clause of ERISA would not interfere with the

ability of the states to regulate their

traditional areas of responsibility.

ERISA preemption analysis "must
be guided by respect for the
separate spheres of govern-
mental authority preserved in
our federalist system".

Fort Halifax Packing Co., Inc. v. Coyne, 482

U.S. 1, 107 S.Ct. 2211, 2221, 96 L.Ed. 24 1

(1987), citing Alessi v. Raybestos-Manhattan,

16
Inc., 451 U.S. 504, 522, 101 S.Ct. 1895, 1905

(1981). This is exactly the analysis which
the Court of Appeals undertook in this matter.
This analysis was in keeping with the clear
mandate of the decisions of this Court.

The decision by the Court of Appeals is

in accord with the reasoning of Metropolitan

17

no such conflict.

As noted above, the Court of Appeals in
the case at bar did follow the required
analysis set forth by this Court in

Metropolitan Life. The particular issue in

Life.

III. THERE IS NO SUBSTANTIAL AND DIRECT
CONFLICT AMONG THE COURTS OF APPEALS

THAT A DECISION IN THIS CASE WILL
RESOLVE.

The Petitioner argues that the Court of
Appeals for the Third and Sixth Circuits are
in conflict on this preemption issue with the
Courts of the Fourth, Fifth, Seventh, Eighth
and Ninth Circuits which Petitioner states

"have followed Metropolitan Life". There is

Metropolitan Life involved whether a state law

could mandate that a self-funded ERISA plan
must provide certain benefits. Both the Third
and the Sixth Circuits have held in accord
decision in

with this Court's

Metropolitan Life that such state laws are

preempted by ERISA. Insurance Board of

Bethlehem Steel Corporation v. Muir, 819 F. 2d

408 (3d Cir. 1987); Liberty Mutual Insurance

Group v. Iron Workers Health Fund of Eastern

Michigan, 879 F.2d 1384 (6th Cir. 1989). In

cases involving state laws mandating the

18

provision of certain benefits, there is an
easily applied "bright-line" test of whether
the ERISA plan is self-funded as opposed to
fully insured. Such a simplistic test does
not work in analyzing the preemption issue as
it involves a state motor vehicle "no-fault"
statute which clearly encompasses an area of
traditional state regulation. The analysis
provided by the Court of Appeals for the
Third Circuit in this case was totally in line
with the dictates of this Court.

The decisions cited by the Petitioner
from the other Courts of Appeals are not in
direct conflict with the decision at bar.

Both Children's Hospital v. Whitcomb, 778 F.2d

239, (5th Cir. 1985) and Reilly v. Blue Cross

and Blue Shield United of Wisconsin, 846 F.2d

oe ah

Fein ad 6 ee ae Oe ee ee (eee en

|
5
:
:
:
:

19

416 (7th Cir. 1988), cert. denied, 194 S.Ct.

145.(1988), dealt with state requirements that
a plan provide certain benefits or state law
remedies to force a plan to provide certain

benefits. These decisions are directly

determined by Metropolitan Life. Both Baxter

v. Lynn, 886 F.2d 182 (8th Cir. 1989) and

United Food & Commercial Workers v.

Pacyga,

801 F.2d 1157 (9th Cir. 1986) dealt with state
common law prohibitions against subrogation.
Neither involved a comprehensive state motor
vehicle insurance statute where the analysis
used by the Court of Appeals herein was
necessary given the traditional state interest
Powell v.

in automobile insurance. In

Chesapeake & Potomac Telephone Co. of

~Virginia, 780 F.2d 419 (4th Cir. 1985), cert.

20

denied, 1170 (1986),

476 U.S. the issue was

the application of the state insurance trade
practices law to the plan, which would have
required that the state "deem" the plan to be

an insurance company.

Only Northern Group Services, Ince. v.

Auto Owners Insurance Co.,

1987),

833 F.2d 85 (6th

Cir. cert. denied, 108 S.Ct. 1754

(1988), involved the same issue as the case at

bar. Petitioner concedes that both Courts of

Appeals applied the same reasoning and reached

the same conclusion. This Court refused to

review the Northern Group Services decision.

It is noteworthy that even if one were to
use the broad generalizations that Petitioner

uses in attempting to argue that there is a

conflict, the cases cited by Petitioner

eT ee a ere ee Tver een ONG ce te is Oe ln Be abet

SP Ca eh

21
clearly establish that this Court has on at

least three prior occasions refused to resolve

the alleged conflict. Powell, cert. denied,
476 U.S. 1170 (1986);

104 S.ct. 145 (1988); Northern Group Services,

Reilly, cert. denied,

cert. denied, 108 S. Ct. 1754 (1988).

iV. THERE IS NO FEDERAL INTEREST IN
“ PREEMPTING THE PENNSYLVANIA MOTOR VEHICLE

FINANCIAL RESPONSIBILTIY LAW.

Both the case at bar and the Northern

Group Services case involved state no-fault

’
automobile insurance laws and a state's

uniform scheme of coordination of benefits.
In neither case is there 4 discernable federal

interest and the holdings are quite limited

to the facts set forth in those cases.

22

The issue involved in this case is a
preemption of the Pennsylvania Financial
Responsibility Law and not just the section
that the Petitioner does not find beneficial
to its interests. If the Financial
Responsibility Law were preempted by FERISA,
the Petitioner is under the incorrect
assumption that its plan would then become the
law of Pennsylvania for all of its
beneficiaries. It is particularly noteworthy
that the subrogation clause of the FMC Salary
Health Plan as spelled out at page A4 of the
Petition for Writ of Certiorari specifically
provides that a beneficiary under the plan
bringing a liability claim against any third
party must claim benefits paid pursuant to

the FMC plan and must reimburse the plan for

23
all benefits provided. The enforcement of

such plan provisions would fly directly in the
face of the Pennsylvania "no-fault" motor
vehicle insurance system and could change the
rules of state pleading and procedure in
third-party tort liability cases where a plan
beneficiary was involved. No-fault motor
vehicle insurance laws traditionally restrict
the ability of injured parties to collect
certain benefits in third party tort suits.
The provisions of the FMC plan would not

be substituted for the Financial
Responsibility Law but rather this Court or
another federal court would have to establish
Federal "common law" as to automobile
liability claims and coordination of benefits

provisions. It certainly was never the

24

inte
ntion of Congress that the federal courts

woul
d adopt a national uniform System of

aut
omobile insurance Claims and Procedur
e

Pursuant to ERISA,

co
rrect decision in this case, The Petiti
on

fo
r 6Certiorari Should be denied by thi
s

Honorable Court,

V. TH
EAD Wor tn ag MMCrAL tStonerazz am
A I
THAT IT WOULD BE PREEMPTED BY ERISA

.
Although the Court of Appeals fop the

y

25
benefit plans, 29 U.S.C. §1144(a), this amicus

curiae argued in that Court that the Financial
Responsibilty Law does not come within the

scope of the ERISA preemption in the first

place.
It is firmly established that not all

state laws with an impact on ERISA plans are

preempted. This Court determined in Mackey v.

Lanier Collections Agency that FRISA did not

supersede the Georgia garnishment law and as
part of its discussion listed numerous state

laws which “although obviously affecting and

involving ERISA plans and their trustees, are
not pre-empted by ERISA §514(a)." 108 S.Ct.
2187. In Shaw v. Delta Airlines, Inc., 463

U.S. 85, 87, 103 S.Ct. 2890, 2901, 77 L. Ed.
2d 490 (1983), this Court held that "some

26
state actions may affect employee benefit

plans in too tenuous, remote, or peripheral a
manner to warrant the finding that the law
‘relates to' the plan".

The Pennsylvania Financial Responsibility
Law is not aimed at ERISA plans nor does it
deal with the subjects regulated by ERISA.
The Pennsylvania Law is concerned with
no-fault automobile insurance, not employee
benefit plans. It does not require employee
benefit plans to provide coverage for
automobile accidents or even to provide any
health benefits coverage at all. The
Financial Responsibility Law does not
materially "relate to" or "proport to

regulate" ERISA plans and therefore is not

27
preempted.

CONCLUSION

‘The analysis by the Court of Appeals was
sound and as directed by this Court's prior
decisions. The Petition for Writ of
Certiorari should be denied by this Honorable

Court.

Respectfully Submitted,

SIKOV AND LOVE, P.A.

Counsel of Record for Amicus Curiae
Pennsylvania Trial Lawyers
Association

1400 Lawyers Building
Pittsburgh,.-PA 15219

(412)261-4202

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0698%3A04. Public record. Not legal advice.